Jcc Debates Storm's Impact On Tax Rates

$1m Expected Share Of Costs

September 25, 2003|By DAPHNE SASHIN Daily Press

JAMES CITY — Several county supervisors say they can afford a $1 million bill resulting from Hurricane Isabel -- and still deliver the one-penny tax cut they promised citizens the week before the storm.

The $1 million is the bill the county could be looking at after insurance, federal and state reimbursements for debris pickup, repairs to county buildings and vehicles, and overtime pay, county Finance Manager John McDonald said Wednesday.

The county would typically look to its contingency fund. But the four Republican supervisors agreed earlier this month that the $690,533 fund -- plus about $60,000 in real estate tax collections that hadn't been expected when the budget was drafted -- could withstand a $583,000 cut and be turned back to taxpayers.

John McGlennon, the only Democrat on the board and the only supervisor who voted against reducing the tax rate, said the county is in no position to make that cut now.

"I've been on the board for six years now, and in four of those years, we've needed contingency funds to cover this kind of emergency. But nothing as extensive as this one," he said. "I certainly would expect that we would reconsider the decision to reduce the tax rate because it was approved on the basis that we wouldn't need that contingency."

The board could vote to reverse or postpone the tax cut at its Oct. 14 meeting, county Administrator Sandy Wanner said. He plans to meet with financial officials and supervisors early next week to present the options and make a recommendation.

Board chairman Jay Harrison said "we can do a tax cut and just hunt for the extra million dollars," though he added he would listen if taxpayers wanted the county to put the $583,000 toward the cleanup instead.

Supervisor Michael Brown, who initiated the tax cut, said there is "sufficient flexibility in our large complex budget" to pay for the cleanup without rescinding the real estate tax cut. He did not suggest any specific ways to do that except for tapping the county's $10 million cash reserves. "A disaster like this is what you have reserves for," Brown said. "One of the reasons we have substantial cash reserves is to meet one-time unforeseen situations."

McDonald said those cash reserves are the reason why the county has a good bond rating -- and can borrow money at lower rates than many other government agencies. If the money's spent, the rating might change and borrowing will cost taxpayers more for interest.

He said the decision is up to the board, but said he would recommend it reduce spending "rather than raid our savings."

"We're within a month of issuing bonds for a $14 million radio system, we've got a high school coming up. We'd just as soon not endanger that bond rating, and we'd prefer and we would recommend that we find money someplace else in our budget," he said.

More than likely, he said, that will mean scrubbing the capital budget by deferring spending on projects such as stormwater improvements, underground utilities, bikeways and sidewalks, or the expansion of the Human Services building.

Supervisor Bruce Goodson said "no solution should be off the table," including rescinding the tax cut.

"I had no idea that we're looking at that kind of cost over what was going to be funded" by the federal government, Goodson said. "I would hate for us to be unable to pay against a future capital need because of having to spend money to pay for the need of the disaster."

But Supervisor Jim Kennedy said the tax cut should stay. A homeowner with a house assessed at $200,000 would get back $20 -- a sum that "might be important to people going a week without pay."

"There are many people out of work, there are going to have to be deductibles that have to be paid," he said. "I think it's outrageous to consider eliminating it with all the out-of-pocket expenses people have with this storm."

Daphne Sashin can be reached at 223-5684 or by e-mail at dsashin@dailypress.com